Gates ready to bankroll Disney battle

BILL Gates is poised to play kingmaker in Comcast's bid for entertainment giant Walt Disney.

The Microsoft chairman is likely to step in to sweeten Comcast's takeover offer after Disney shareholders made it clear they would not accept the cable TV group's initial all-share offer, which valued the Magic Kingdom at $66 billion (£35 billion).

Microsoft's $3 billion, or 7.4%, stake in Comcast makes it the biggest outside shareholder. Gates appears willing to dip into Microsoft's $53 billion cash pile to clinch the deal. Microsoft insiders have played down rumours that it might offer a rival bid for Comcast, but have not denied speculation that Gates could increase his stake in the company to add cash to the deal.

Gates is said to have developed a good working relationship with Brian Roberts, head of Comcast, since Microsoft injected $1 billion in 1997 to help it grow into America's premier cable TV company.

A drop in Comcast's share price and a jump in Disney's stock since the deal was announced widened the premium between the bid price and what Disney investors expect for their shares to 20% late last week, prompting calls for Roberts to boost his offer.

Major Disney rivals News Corp, Viacom, TimeWarner and General Electric have either ruled themselves out of the bidding or would almost certainly be blocked by regulators on anti-monopoly grounds.

John Malone's Liberty Media, which has a market worth of just $33 billion, and Barry Diller's Inter-Active, valued at $23 billion, are thought to be the most likely candidates to launch a rival offer, but they might have to take on partners to top Comcast's offer.

Analysts said the prospect of a white knight emerging to rescue Disney was unlikely as long as Michael Eisner, the imperious and unpopular chairman, remained.

Apple founder and Pixar Studio head Steve Jobs, who recently split with Eisner over extending the partnership with Disney that has produced blockbusters Monsters Inc. and Finding Nemo, has been touted as a possible replacement for Eisner. Some reports suggest he is planning a takeover bid of his own.